Does director capital influence board turnover after an incident of fraud? Evidence from Italian listed companies

Studies in U.S. have found that that director capital influences turnover within the board after an incident of fraud. We analyse whether there is a relationship between the probability of non-executive director turnover in Italian listed firms in which fraud has occurred and each director’s level of: (1) general business knowledge, (2) industry knowledge, and (3) relational capital. Our results suggest that non-executive director departure can be explained as a result of decisions by companies to clean their house of directors with lower expertise, industry knowledge and relational capital. These findings indicate that firms encourage the departure of these non-executive directors to signal to their stakeholders that they want to repair legitimacy and want to enhance the monitoring and resource provider tasks of the board. Indeed, in Italy, director turnover is more marked when the fraud visibility is greater. Furthermore, our study findings indicate that the cleaning house strategy is not influenced by the ownership structure and identity.     

How does homeland security affect U.S. firms' international competitiveness?

This paper frames the issue of homeland security and its relationship to the international competitiveness of U.S. firms in general. This is largely a conceptual statement, identifying the areas of national security (homeland security) that are key to business, and exploring the management concerns of business to the new threats and opportunities that have arisen.We establish the point that homeland security is a purposeful, conscious, and rational response to terrorist events that is an emergent and evolving systems phenomenon. This systems approach is an especially useful way to look at the implications of homeland security in its relation to business. We then look specifically at the kinds of costs and risks that are generated for U.S. international business (exports, imports, incoming and outgoing investments) as a result of this phenomenon. Management strategies for dealing with these costs and risks are explored for U.S. firms.Our conclusion is to demonstrate the scope of analysis that is needed to understand and to managerially cope with the homeland security problem. We show the value of using theory from various disciplines for analyzing a multi-dimensional problem like this. And finally we are able to recommend some policy dimensions for both companies and the U.S. Government toward mitigating the negative impacts of the homeland security problem.     

Does social exchange relationship impair audit committee effectiveness?

This research applies the three-tier agency theory and social exchange theory to study the role of audit committees in improving financial reporting quality and reducing the likelihood of earnings restatements. Utilizing a matched sample of restated and non-restated U.S. listed firms between 2002 and 2005, this paper finds that firms with a larger proportion of audit committee members appointed after the CEO are associated with higher incidences of restatements, while the presence of an all-independent nomination committee is associated with a lower likelihood of restatements. The paper also shows that firms whose audit committee members have longer average tenure and receive higher director compensation are associated with a smaller likelihood of restatements. Finally, the paper documents changes in the impact of audit committee characteristics on financial restatements after the enactment of the Sarbanes–Oxley Act. Overall, our results suggest that audit committees’ effectiveness in supervising financial reporting quality is affected by social exchange processes and the broad social context.     

Does employee welfare affect corporate debt maturity?

This study examines the effect of employee well-being on the corporate debt maturity structure of U.S. firms. It hypothesizes that a firm's degree of commitment to employee welfare affects its debt maturity structure. Using a sample of 19,347 firm-year observations over the period 1991–2014, we find evidence that firms with higher employee welfare scores prefer long-term debt over short-term debt. This relationship is more pronounced for firms operating in human-capital-intensive industries and firms with lower labor union-membership rate. Our findings are robust to endogeneity concerns and insensitive to the use of alternative regression methods, variable measurements, and sample compositions. This paper provides novel evidence on the role of employment policies and practices in explaining variations in debt maturity.     

Response strategy to environment context factors using a lean and agile approach: Implications for firm performance

Based on the environment-strategy performance perspective and dynamic capabilities framework, we develop a theoretical model and hypotheses specifying how supply chain collaboration as a response to environment context factors – competitive intensity, supply uncertainty, technological turbulence and market turbulence, using a lean and agile strategy may influence firm performance. We test the model using partial least square structural equation modelling on data collected from a field survey with responses from 152 manufacturing firms representing a variety of industries. Empirical findings generally support the relationship between collaboration and firm performance using a lean and agile strategy. Also, for firms in industries that face environments characterised by high supply uncertainty and competitive intensity with, technological turbulence, the study finds evidence of a direct relationship between these environmental factors and supply chain collaboration. The findings provide an initial strategic response framework for appropriately aligning a lean and agile supply chain strategy through collaboration with environment context factors to achieve firm performance improvements.     

Capital structure decisions in family firms: empirical evidence from a bank-based economy

This paper analyzes the question if and how founding families influence the capital structure decision of their firms. By using a unique, partially hand-collected panel dataset of 660 listed German companies (5,135 firm years) over the period 1995–2006, we come up with the following results: German family firms have significantly lower leverage ratios than non-family firms. With respect to the question how families influence the capital structure of their firms, we can show that the family impact is mostly driven via management involvement. In this context, we also detect that the presence of a founder CEO has a strong negative effect on the leverage ratio. Our results prove to be stable against a battery of robustness tests, including the influence of other types of blockholders and the firms’ life cycle. Moreover, we use a propensity-score based matching estimator to alleviate concerns of reverse causality. Overall, our study suggests a strong, negative and causal relationship between family firm characteristics (especially family management) and the level of leverage.     

Influence of alliance portfolio diversity on innovation performance: the role of internal capabilities of value creation

In this study, we suggest a new perspective on the linkage between alliance portfolio diversity and innovation performance based on a contingency approach. Using a longitudinal data set on alliance portfolios and patents of 182 firms in the U.S. manufacturing industries, we examined that alliance portfolio diversity has a U-shaped relationship with firm-level innovation. Internal value creation capabilities in terms of routine and ability are found to moderate the relationship between alliance portfolio diversity and innovation performance: organizational search routine strengthens the relationship of alliance portfolio diversity and innovation performance while technological capabilities weaken and flip the relationship.

     

The impact of family CEO’s ownership and the moderating effect of the second largest owner in private family firms

This study explores two ownership issues in private family firms. First, we investigate the relationship between the ownership of family CEOs and firm performance, and postulate that this relationship in private family firms is more complex than the inverted “U” relationship found in public family firms. Second, we predict a potential moderating effect of the second largest owner, who may exert a monitoring role on family CEOs. We focus on private family firms as recent studies show that private family firms have distinct features compared to public family firms, and that findings documented in public family firms may not apply to the ubiquitous, but much less studied, private family firms. We have applied agency theory to develop the two hypotheses, used secondary data on a large sample of private family firms, utilized an adjusted conventional quadratic technique to test the hypotheses, and validated the findings using a second method of piecewise linear specification. The results show that the non-linear relationship between the ownership of family CEOs and firm performance is more complicated than the often-documented inverted “U” shape from public firms. Meanwhile, the second largest owner with a high enough ownership stake can impose a positive moderating effect by mitigating potential agency problems caused by family CEOs.     

Foreign Competition and Innovation: The Mediating Role of Imitation

This study examines the extent to which foreign competition affects the innovation performance of domestic firms through imitation, given firms’ absorptive capacity. In analysing longitudinal firm‐level data from the UK, we find a mediating effect of imitation on the relationship between foreign competition and local firms’ innovation performance, and an inverted U‐shaped relationship between imitation and the innovation performance of local firms. Our findings further reveal that absorptive capacity moderates the mediating effect of imitation, diminishing innovation gains at moderate levels of imitation and mitigating the diminishing innovation performance at high levels of imitation.     

International alliance formation and stock market responses:: Industry globalization as an environmental contingency

This study examines the effects of the degree of industry globalization on international alliance formation in terms of the type of alliance chosen by partner firms and stock market responses to the chosen type of alliance. Using a sample of 244 international alliances formed between U.S. and non-U.S. firms for the 1992–97 period, we find that nonjoint venture (joint venture) alliances take place relatively more frequently in global (multidomestic) industries than in multidomestic (global) industries. We also find that in global industries, abnormal returns to nonjoint venture partners are relatively greater than those to joint venture partners, whereas in multidomestic industries, abnormal returns to nonjoint venture partners are relatively smaller, though insignificant, than those to joint venture partners. Our findings suggest that the degree of industry globalization plays an important role in explaining which type of international alliance is likely to be chosen by partner firms when entering an alliance and how stock markets tend to respond to the chosen type of alliance.     

The influence of higher order cognitive capacities on leader organizational continuance and retention: The mediating role of developmental experiences

The relationship between cognitive capacities and retention or turnover has received scant attention in the extant literature. The few findings that have been reported show mixed to no linear effects of general mental ability on organizational continuance. In this study, we examined the association of more specific higher order cognitive capacities including complex problem solving skills and divergent thinking with officer continuance in the U.S. Army. We also tested the role of developmental experiences as a partial mediator of this relationship. Our sample included 640 officers who completed measures of these skills and of their career experiences in 1992–1993. To this sample, we added years of service from date of commissioning to 2008, as well as data on whether officers experienced particular assignments considered to be challenging and developmental. Our findings support the association of complex problem solving and divergent thinking skills with leader continuance. We also found that this effect is partially mediated by challenging developmental experiences. Thus, we provide stronger evidence than in prior studies for a linear relationship between cognitive abilities and continuance in an organization.     

我国高新技术企业规模与创新分布

利用 960家高新技术企业的调查结果 ,分析了我国高新技术企业规模与企业创新能力之间的关系 .企业规模以企业雇员数量作为分类 ,按照国际通用的分类标准分析了各个规模层次的企业创新费用、R&D费用、销售额及创新率的分布规律 .在将研究结果与国外学者的研究结果和一般工业企业的情况进行了比较之后发现 :(1 )高新技术企业 R&D强度随着企业规模的增大呈阶梯下降趋势 ;(2 )创新强度大体呈现“凸 U”型分布 ;(3)相当一部分小型高新技术企业的创新效率较低     

Off the rivals’ radar in emerging market segments: Non-mutual rival recognition between new firms and incumbents

We examine the causes of non-mutual rival recognition—a situation in which new firms in emerging market segments recognize incumbents in pre-existing and potentially related market segments as rivals, but the incumbents do not recognize the new firms as rivals. Drawing upon the prototype theory, which makes use of cognitive representations or images in recognition processes, we argue that managers use rival prototypes in making sense of competitive environments. Specifically, we argue that non-mutual rival recognition occurs when new firms are not proximate to the incumbents' prototype of rivals because their organizational attributes, such as size and age, are highly distinct. It also occurs when it is difficult for incumbents, owing to their diversification into multiple product markets, or their strong identity as players in emerging market segments, to clearly assess new firms’ proximity to the prototype. Using the context of U.S. online retailers that went public between 1995 and 2001, we find support for our arguments.     

Effects of Firm-specific and Country-specific Advantages on Relative Acquisition Size in Service Sector Cross-Border Acquisitions: An Empirical Examination

Using a sample of 348 service sector cross-border acquisitions by U.S. firms in 44 countries during 1990–2006, our study seeks to identify factors that influence relative acquisition size (acquisition transaction value as a percentage of acquiring firm's asset value). Our findings indicate that firm-specific advantages (FSAs) in the form of available financial slack and target industry knowledge were positively associated with relative acquisition size. However, contrary to expectations, we observed a negative relationship between cross-border acquisition experience and relative acquisition size. In addition, our results suggest that country-specific advantages (CSAs) associated with higher market potential, lower political risk, and greater cultural similarity contributed to increased relative acquisition size in service industry cross-border acquisitions. Finally, our analysis reveals that the relationship between available financial slack and relative acquisition size is contingent on cultural similarity with the relationship being more pronounced when cultural similarity is high.     

Choosing between international technology licensing partners: An empirical analysis of U.S. biotechnology firms

This paper examines the potential factors that might influence U.S. biotechnology holders’ licensing decisions regarding whom to choose as foreign licensing partners in the context of a global environment. The important explanatory factors relate to the knowledge appropriability regime of the licensee country (i.e. strength of IPR protection), familiarity through prior interaction, business similarity between partners, and prior independent experience as a licensor. U.S. biotechnology firms also license technology more to partners who have joint manufacturing, marketing, and research and development (R&D) experience. The results show that transaction cost considerations weigh heavily when choosing international licensing partners.     

Inventor knowledge recombination behaviors in a pharmaceutical merger: The role of intra-firm networks

We study firms' abilities to increase the generative appropriability of their knowledge by studying the knowledge recombination patterns of inventors in the context of a merger between two equally sized pharmaceutical firms. Specifically, we study inventors' choices to recombine knowledge originating in the firm with which they merge. We hypothesize that mergers focus inventors' attention to units of knowledge originating in the other firm and that therefore, inventors will choose to recombine more of this knowledge, which exists in their intra-firm network, following a merger. We also hypothesize that inventors vary in terms of their recombination choices following a merger. We explore these differences by linking inventors' network positions with their abilities and motivations to recombine knowledge originating in the other firm. Specifically, we hypothesize an inverted-U shaped relationship between centrality and knowledge recombination from the other firm and a linear relationship between brokerage and knowledge recombination from the other firm. We test our hypotheses using patent data from the merger between Bristol-Myers and Squibb and find support for our hypotheses. The paper contributes to knowledge recombination research by exploring changes in knowledge recombination dynamics following a merger and by understanding how mergers affect firms’ generative research trajectories. Practically, we suggest that managers should identify and nurture certain types of inventors following a merger to be able to better leverage the knowledge bases of merging firms.     

The micro-foundations of industrial diversification through foreign acquisitions: The multifaceted role of CEO experience

This paper examines the micro-foundations of cross-border industrial diversification strategies. We study the impact of observable CEO experience attributes on the propensity to acquire foreign target firms in unrelated (versus related) industries. Our findings, based on a sample of UK-based firms that engaged in cross-border acquisitions between 2010 and 2016, support an inverted U-shaped relationship between life experience of the CEO and the likelihood of engaging in unrelated foreign acquisitions. Further, we find that CEOs' broad-based work experience, across countries or industries, is associated with a higher propensity to engage in unrelated foreign acquisitions. Finally, CEOs’ education experience in MBA-type qualifications is associated with a preference for related foreign acquisitions. We discuss the theoretical implications of these findings and outline directions for future research in the context of micro-foundations in international business, strategic leadership, and upper echelons theory.     

Ambidextrous Organizational Culture,Contextual Ambidexterity and New Product Innovation: A Comparative Study of UK and Chinese High‐tech Firms

Contextual ambidexterity is of paramount importance for new product innovation and organizational success, particularly in high‐tech firms operating in a dynamic environment. Whilst it is recognized that contextual ambidexterity is grounded in organizational culture, existing research has not crystallized what kind of organizational culture enables contextual ambidexterity and consequently new product innovation. In this paper, drawing on data from 150 UK and 242 Chinese high‐tech firms, we conceptualize ambidextrous organizational culture as a higher‐order construct consisting of organizational diversity and shared vision, and examine its impacts on contextual ambidexterity and consequently on new product innovation outcomes. Using structural equation modelling, we find significant relationships between ambidextrous organizational culture, contextual ambidexterity and new product innovation outcomes; contextual ambidexterity mediates the relationship between ambidextrous organizational culture and new product innovation outcomes. Our findings also suggest that the above relationships are robust in the UK–China comparative research context, and that contextual ambidexterity and new product innovation outcomes are dependent on business unit level heterogeneity (i.e. ambidextrous organizational culture and research and development strength) rather than industry or cross‐cultural differences.     

股权结构、高管持股与公司绩效——来自民营上市公司的证据

本文以1999年至2003年的民营上市公司为研究对象,回避国有上市公司的非市场因素,研究股权结构、高管持股对绩效的影响。实证研究显示:第一大股东绝对控股时,其持股比例越高公司绩效越好,这时高管的股权激励无法发挥作用;当第一大股东持股比例低于20％时,高管的股权激励也无法发挥作用;当第一大股东持股比例在20％至40％之间时,其持股比例和绩效呈现倒U型关系,这时高管的股权激励发挥显著的作用。不同的股权结构对股权激励和绩效产生不同的影响,设计公司治理机制时应充分考虑这一因素。     

Communicating Under Section 112(r) of the Clean Air Act Amendments

Regulations under Section 112(r) of the 1990 Clean Air Act Amendments require fixed facilities having threshold quantities of materials on the U.S. Environmental Protection Agency's list of regulated substances to disclose to the general public the expected offsite consequences of worst-case accidental chemical releases. This paper describes the communication practices of small firms in Delaware and New Jersey and the practical problems these facilities might encounter complying with the proposed rule. The paper reports an interesting difference between the apprehension voiced by small firms required to report worst-case release information and the public's apparent lack of interest in such information. Unlike the difficulty expected by small firms in calculating and communicating worst-case chemical release information, this paper includes some observations on the ability of large chemical firms to comply with the proposed requirements.